LAWS20060: Income Tax - Capital Expenditure - ITAA97 - Taxation Law Assignment Help

Internal Code : 1IEFG

Taxation Law Assignment Help

Task: 1 Students must complete all questions in the Assignment. With reference to all questions - To support the analysis in your answers refer where appropriate to the ITAA97, ITAA36, Tax Rulings and/or case law. 1. What are the primary functions of taxation in Australia? 2. What does equity mean when discussing the design of a good tax system? 3. In what way does s4-15 Income Tax Assessment Act 1997 require you to work out your taxable income? 4. Briefly explain what a progressive tax system aims at achieving? 5. Which section of the Income Tax Assessment Act 1997 includes the value of allowances in assessable income? 6. What topic does Taxation Ruling TR 2004/15 7. Which two Divisions of the Income Tax Assessment Act 1997 provide deductions for capital expenditure? 8. What is the applicable tax rate for a taxpayer who has $80,000 of taxable income in 2017/18? 9. What sub-divisions of Income Tax Assessment Act 1997 list the provisions that treat amounts as Non Assessable Non Exempt income? 10. Tax Determination TD 2017/4 sets out the cents per kilometer rates for private use of motor vehicles for the FBT year starting 1 April 2017. What is the applicable rate for motor vehicles with an engine capacity over 2500cc. Task: 2 Martelle, is a designer, who came to Australia in November 2017 on an assignment creating colorful designs based on the vibrant colors of the Great Barrier Reef. The project is expected to take six and a half months. Martelle purchased a small boats that she would be able to enjoy the islands she is using as inspiration for her designs and to take friends at weekends to the special locations she has discovered. Martelle’s salary is paid into the Australian bank account she opened when she arrived. Martelle intends to return to France, her country of domicile, and to her family when the contract is over. Her father has agreed to look after all her assets and investments for her while she is on assignment in Australia. Martelle was hoping that she may be considered non-resident for Australian tax purposes and has come to you for advice. Explain to Martelle the factors that the ATO will take into consideration and comment on her likely residency status. Explain the tax consequences of being classed a resident or not for tax purposes. Task: 3 Ellen, a web designer, earned the following amounts during the 2017/18-tax year. 1. $9,000 per month, paid directly into her Westpac bank account. 2. $425 interest on her Westpac bank account. 3. $6,500 winnings as ‘Queensland Designer of the Year’. 4. After winning ‘Queensland Designer of the Year’, her employer asked Ellen to sign a restrictive covenant saying that she would not start up in business on her own for one year, should her employment with them terminate. She received $10,000 upon signing the restrictive covenant. 5. Ellen took out private health insurance for the last 60 days of the income tax year, costing her $500. Assume Ellen is classified as an Australian resident for tax purposes. Discuss the assessability of the above amounts with specific reference to legislation and case law where applicable. Calculate Ellen’s net amount of income tax payable for the tax year ending 30 June 2018. Task: 4 Jennifer owns a hair dressing business. She purchases the following items for sole use in the hair dressing business: 1. One special stand alone hairdryer on the 1 st of July at a cost of $8,000. It has an estimated life of seven years. 2. A new computer software program, to manage her bookings and stock, with an effective life of three years costing $295. 3. An Audi Q5 on the 1 st July costing $85,000 with an estimated life of six years. What amount is allowed as a deduction for the decline in value of the above items purchased during the current income year using both methods available? Task: 5 Julie is a very keen photographer and is considering setting up her own business. It has been a hobby of hers for many years but she now wants to take it more seriously. Outline to Julie, the factors that she needs to take into consideration should she wish to ensure that her ‘new business’ is interpreted as such by the ATO. Use specific examples that relate to her photography business, reference to case law and any legislation. Task: 6 Chang runs his own marketing business. During the year he incurred the following expenses: 1. salary costs of $300,000. 2. salary costs of $4,000 for his son who did some graphic design work for him as he was studying graphic design at university. The work took approximately 9 hours to complete. 3. $900 on membership to the local bowls club where he entertains clients. 4. $2,000 on smart clothing that he considered necessary to portray the correct image to his clients. 5. $5,500 on meal expenses for his important clients. 6. Interest cost of $3,400 on a loan he took out to start up the business. 7. $3,000 in travelling from home to work. 8. $2,500 in telephone bills, of which he estimates 80% to be used for calling clients. 9. $6,000 on airfare and accommodation to a marketing conference. 1. $500 charged by his accountant to complete his tax return for the year. Advise Change as to the deductibility of the above expenses. Ensure to make reference to relevant legislation.